Davenport v. Chrysler Credit Corp.

• Decision Date: 01 May 1991
• Citation: 15 UCCRep.Serv.2d 324,818 S.W.2d 23
• Parties: 15 UCC Rep.Serv.2d 324 Debbie S. DAVENPORT and Larry R. Davenport, Plaintiffs/Appellants, v. CHRYSLER CREDIT CORPORATION and P.L. Pentecost, Defendants/Appellees.
• Court: Tennessee Court of Appeals

Page 23

818 S.W.2d 23

15 UCC Rep.Serv.2d 324

Debbie S. DAVENPORT and Larry R. Davenport, Plaintiffs/Appellants, v. CHRYSLER CREDIT CORPORATION and P.L. Pentecost, Defendants/Appellees.

Court of Appeals of Tennessee,

Middle Section at Nashville.

May 1, 1991.

Permission to Appeal Denied by

Supreme Court Sept. 23, 1991.

John J. Hestle, Clarksville, for plaintiffs/appellants.

Ellen Hobbs Lyle, Trabue, Sturdivant & DeWitt, Nashville, for defendants/appellees.

OPINION

KOCH, Judge.

This appeal stems from the repossession of a new automobile shortly after its purchase. The buyers filed an action in the Circuit Court for Montgomery County seeking statutory and punitive damages. The trial court, sitting without a jury, found that the repossession was proper and awarded the creditor a $6,774 deficiency judgment on its counterclaim. The debtors have appealed, asserting that the automobile should not have been repossessed and that the repossession was carried out improperly. We find that the repossession was carried out improperly and, therefore, reverse the judgment.

I.

Larry and Debbie Davenport purchased a new 1987 Chrysler LeBaron from Gary Mathews Motors on October 28, 1987. They obtained financing through Chrysler Credit Corporation ("Chrysler Credit") and signed a retail installment contract requiring them to make the first of sixty monthly payments on or before December 8, 1987.

The automobile developed mechanical problems before the Davenports could drive it off the dealer's lot. Even before their first payment was due, the Davenports had returned the automobile to the dealer seven times for repair. They were extremely dissatisfied and, after consulting a lawyer, decided to withhold their monthly payments until the matter was resolved.

Chrysler Credit sent the Davenports a standard delinquency notice when their first payment was ten days late. The Davenports did not respond to the notice, and on December 23, 1987, Chrysler Credit telephoned the Davenports to request payment. Mrs. Davenport recounted the problems with the automobile and told Chrysler Credit that she would consult her lawyer and "would let them know about the payment." After consulting the dealer, Chrysler Credit informed Mrs. Davenport that it would repossess the automobile if she did not make the payment.

Chrysler Credit telephoned the Davenports on December 30, 1987 because their first payment was three weeks late. Mr. Davenport told Chrysler Credit that he had turned the matter over to his lawyer and that he was not going to make the payment. Chrysler Credit telephoned again on January 7, 1988. On this occasion, Mrs. Davenport stated that their lawyer had instructed them to make the payment, and Chrysler Credit requested her to send the payment to its Brentwood office.

Chrysler Credit telephoned the Davenports one last time on January 13, 1988. It had still not received their first payment, and their second payment was five days past due. Mrs. Davenport insisted that she had mailed one payment ¹ and added that she "was not responsible for the mail." Before hanging up abruptly, she also stated that she did not intend to make any more payments "on the advice of her attorney." At this point, Chrysler Credit determined that the Davenports were in default and requested American Lender Service Company to repossess the car.

Employees of American Lender Service arrived at the Davenports' home on the evening of January 14, 1988. They informed the Davenports that they were "two payments in default" and requested the automobile. The Davenports insisted that they were not in default and, after a telephone call to their lawyer, refused to turn over the automobile until Chrysler Credit obtained the "proper paperwork." The American Lender Service employees left without the car.

Before leaving for work the next morning, Mr. Davenport parked the automobile in their enclosed garage and chained its rear end to a post using a logging chain and two padlocks. He also closed the canvas flaps covering the entrance to the garage and secured the flaps with cinder blocks. When the Davenports returned from work, they discovered that someone had entered the garage, cut one of the padlocks, and removed the automobile.

American Lender Service informed Chrysler Credit on January 18, 1988 that it had repossessed the automobile. On the same day, Chrysler Credit notified the Davenports that they could redeem the car before it was offered for sale. The Davenports never responded to the notice. Instead of selling the automobile immediately, Chrysler Credit held it for more than a year because of the Davenports' allegations that the automobile was defective. In July, 1989, Chrysler Credit informed the Davenports that the automobile had been sold and requested payment of the $6,774 deficiency.

II.

We need not tarry long with the Davenports' claim that Chrysler Credit had no basis to repossess the automobile or to accelerate their debt. We disagree. The proof supports the trial court's conclusion that Chrysler Credit had a legal right to initiate repossession procedures.

The Davenports were already two months delinquent when Chrysler Credit decided to repossess the automobile. In fact, they had not made a single payment since they bought the automobile despite Chrysler Credit's repeated requests. Even though Chrysler Credit had warned them of the risk of repossession, the Davenports steadfastly refused to make their monthly payments until their complaints about the automobile were resolved.

The Davenports' dissatisfaction with their automobile did not provide them with a basis to unilaterally refuse to honor their payment obligations in the retail installment contract. At the time the repossession took place, the Davenports had not requested rescission of the contract, attempted to revoke their acceptance of the automobile, pursued their remedies under the "lemon law," ² or taken any other formal steps to resolve their dispute with the dealer concerning the automobile. The Davenports' conduct gave Chrysler Credit an adequate basis to consider the loan to be in default and to decide to protect its collateral by repossessing the automobile.

III.

We now consider whether the repossession of the Davenports' automobile was consistent with Tenn.Code Ann. § 47-9-503 (1979). The trial court determined that it was, relying on Harris Truck & Trailer Sales v. Foote, 58 Tenn.App. 710, 436 S.W.2d 460 (1968). We disagree, but only because Harris Truck & Trailer Sales v. Foote improperly restricts the scope of the protection Tenn.Code Ann. § 47-9-503 affords to buyers of consumer goods.

A.

Tennessee has long recognized that secured parties have a legitimate interest in obtaining their collateral from a defaulting debtor. Prior to the Uniform Commercial Code, secured parties could repossess collateral either with or without the assistance of the courts. Rice v. Lusky Furniture Co., 167 Tenn. 202, 205, 68 S.W.2d 107, 108 (1934). If they chose to proceed without judicial assistance, they were required to obtain the debtor's consent. Nashville Auto Sales Co. v. Wright, 26 Tenn.App. 326, 329, 171 S.W.2d 834, 835 (1943), and to proceed without a breach of the peace. Morrison v. Galyon Sales Co., 16 Tenn.App. 394, 397, 64 S.W.2d 851, 853 (1932).

The General Assembly preserved the secured parties' self-help remedies when it enacted the Uniform Commercial Code in 1963. ³ It also preserved the requirement that repossessions must be accomplished without a breach of the peace. Tenn.Code Ann. § 47-9-503 states in this regard that "[i]n taking possession a secured party may proceed without judicial process if this can be done without breach of the peace or may proceed by action."

B.

Tennessee's version of the Uniform Commercial Code does not define "breach of the peace." Like the U.C.C.'s drafters, the General Assembly decided that this task should be left to the courts. Riley State Bank v. Spillman, 242 Kan. 696, 750 P.2d 1024, 1029 (1988); 2 J. White & R. Summers, Uniform Commercial Code § 27-6 (3d ed. 1988) (hereinafter "White & Summers"). Thus, it falls to us to determine what types of conduct the General Assembly intended to proscribe when it decided in 1963 that repossessions must be accomplished without a breach of the peace.

Our role in construing statutes is to ascertain legislative intent and then to carry it out. Westinghouse Elec. Corp. v. King, 678 S.W.2d 19, 23 (Tenn.1984), cert. denied, 470 U.S. 1075, 105 S.Ct. 1830, 85 L.Ed.2d 131 (1985); Dorrier v. Dark, 540 S.W.2d 658, 659 (Tenn.1976). As we go about our task, we must take care not to unduly restrict the statute's coverage or to expand it beyond its intended scope. See United States v. Bacto-Unidisk, 394 U.S. 784, 800-01, 89 S.Ct. 1410, 1419, 22 L.Ed.2d 726, reh. denied, 395 U.S. 954, 89 S.Ct. 2013, 23 L.Ed.2d 473 (1969).

The courts have many interpretational techniques available to them. We may conduct a textual analysis, giving the words in the statute their natural and ordinary meaning. State v. Williams, 690 S.W.2d 517, 529 (Tenn.1985). We may analyze the statute in light of other related statutes. Westinghouse Elec. Corp. v. King, 678 S.W.2d at 23; Coleman v. Acuff, 569 S.W.2d 459, 461 (Tenn.1978). We may also analyze a statute in light of earlier judicial interpretations of the statute itself or similar statutes. See Southeastern Aviation, Inc. v. Hurd, 209 Tenn. 639, 655, 355 S.W.2d 436, 443 app. dismissed, 371 U.S. 21, 83 S.Ct. 120, 9 L.Ed.2d 96 (1962); Willis & Turner v. Moore & Davis, 151 Tenn. 562, 566-67, 271 S.W. 736, 737 (1924).

No one interpretational tool is inherently more preferable to the others. Thus, the courts should bring all applicable rules of construction to bear in order to elucidate a statute's meaning. O.H. May Co. v. Anderson, 156 Tenn. 216, 219, 300 S.W. 12, 14 (1927).

C.

Any modern interpretation of the "breach of the peace" restriction in Tenn.Code Ann. § 47-9-503 must take into...